Redwire Corporation 2026 Q2 Earnings Call

Good morning, thank you, Diego. Welcome to Redwire's second quarter 2026 earnings call. We hope that you have seen our earnings release, which we issued yesterday afternoon. It has also been posted in the investor relations section of our website at rdw.com. Let me remind everyone that during the call, Redwire management may make forward-looking statements that reflect our beliefs, expectations, intentions, or predictions of the future. Our forward-looking statements are subject to risks and uncertainties that are described in more detail on slides two and three. Additionally, to the extent we discuss non-GAAP measures during the call, please see slide three and the appendix, our earnings release, or the investor presentation on our website for the calculation of these measures and their reconciliation to U.S. GAAP measures. I am Alex Curatolo, Redwire Senior Director of Investor Relations.

Joining me on today's call are Peter Cannito, Redwire's Chairman and Chief Executive Officer, and Chris Edmonds, Redwire's Chief Financial Officer. With that, I would like to turn the call over to Pete.

Pete? Thank you, Alex. During today's call, I will outline our key accomplishments during the second quarter of 2026, after which Chris will present the financial highlights for the same period and discuss our outlook for the remainder of 2026.

We will open the call for Q&A. Please turn to slide six. I'm pleased to report that Redwire delivered significant value in the second quarter of 2026, with new highs in revenue, gross margin, and backlog. During the quarter, Redwire achieved record quarterly revenues of $117.1 million, a 20.7% sequential increase over the previous quarter, and an 89.6% increase compared to Q2 2025. Our disciplined execution drove record gross margins of 27.8% in Q2 2026, an improvement on both a sequential and year-over-year basis.

Redwire achieved a strong book-to-bill ratio of 1.42, and as a result, ended the quarter with record contracted backlog of $542.1 million, providing further confidence in our forecast as we move into the second half of 2026. Finally, we strengthened our balance sheet, resulting in a strong financial foundation with a record level of $557.8 million in cash to fuel our continued growth. In summary, Redwire's second quarter was defined by successful execution to meet the growing demand for our mission-critical offerings. Please turn to slide seven. Access to capital, combined with increasing demand for our products, has created a landscape of opportunities for Redwire to continue to invest in growth. To guide our capital allocation, we are implementing an investment framework focused on three pillars. The first pillar is balance sheet strength.

Over the last few quarters, we have been aggressively refinancing and de-levering while building liquidity to create a strong foundation for future opportunities. This has significantly reduced our interest expense while simultaneously giving us dry powder to invest in new innovations and strategic M&A. The second pillar that logically follows is internal capacity, capability, and innovation. With strong demand in both critical space and defense tech capabilities worldwide, Redwire has many attractive internal investment opportunities that can compound growth through new product advancement, expanded capacity, and innovation across all our key value drivers. Lastly, the third pillar is accretive M&A. We have a proven track record of acquisitions followed by successful integration as an additional path to accelerate growth. Redwire has a strong history with 11 acquisitions completed to date.

With the successful integration of Edge Autonomy over the past year and the required capital to invest, we continue to scan the M&A market for accretive opportunities at good values. We like how we are currently postured, and this framework will guide Redwire into the future as we continue to invest with discipline across all three pillars to drive value for our shareholders. Please turn to slide eight. As examples, I'd like to briefly highlight two major milestones from July that bolster our production momentum. To further strengthen Redwire's position as a worldwide leader in microgravity development, we recently opened a brand-new microgravity center of excellence in Georgetown, Indiana, with expanded lab space and a payload operations center with a direct link to the International Space Station and room for expansion to commercial space stations and other on-orbit microgravity platforms. More on that in a moment.

This new 30,000 sq ft state-of-the-art facility will focus on accelerating space-enabled research, development, and manufacturing for pharmaceutical and biotech innovation. In Huntsville, Alabama, we recently announced a major 164,000 sq ft expansion supported by approximately $8.5 million in eligible state and local economic development incentives. This facility, which is expected to be completed in the fourth quarter of 2027, will accelerate production of our combat-proven Stalker aircraft, Octopus ISR payloads, advanced power solutions, and space capabilities. Huntsville is a very attractive community for advanced manufacturing with ready access to many strategically important customers. We are very excited to expand our presence in the Huntsville ecosystem. Please turn to slide nine. Next, I would like to briefly highlight key second quarter achievements and recent developments across our five value drivers. We will start with our space segment, which encompasses next-generation spacecraft, large space infrastructure, and microgravity development.

Turn to our defense tech segment, which encompasses combat-proven UAS and sensors and payloads. Please turn to slide 10. Starting with next-generation spacecraft. In July, Redwire was selected as one of 15 vendors on the Space Systems Command $981 million National Space Test and Training Complex (NITE-STAR) Capability Development indefinite delivery, indefinite quantity (IDIQ) contract. The NITE-STAR IDIQ contract provides for support to space and ground-based engineering activities to enhance test, evaluation, and training operations. The contract provides a pathway for Redwire to apply its capabilities, such as next-gen spacecraft, digital engineering, and space domain awareness, among others, to support the rapid development, testing, and training of joint warfighting solutions. Much like with the Andromeda IDIQ discussed last quarter, we see this as another proof point for the success of our moving up the value chain strategy.

We are well-positioned to deliver critical spacecraft and digital capabilities for national security testing and training, a key growth area for our customer. Please turn to slide 11. Turning to large space infrastructure. Redwire's Roll-Out Solar Array technology will be supporting NASA's pioneering Space Reactor-1 Freedom mission to Mars. The two ROSA wings can generate an unprecedented 60 kilowatts of power, making them the most powerful ROSA wings ever built. They were originally developed through a contract with Intuitive Machines to support the power and propulsion element of the NASA-led Lunar Gateway. Launching in 2028, SR-1 Freedom will conduct trailblazing solar, electric, and nuclear propulsion demonstrations while delivering innovative scientific payloads to Mars. We continue to provide high power solutions of choice targeted at space stations like the International Space Station and Axiom Station, large spacecraft like SR-1 Freedom, and potential lunar infrastructure and orbital data centers.

The outlook for this capability is strong. Please turn to slide 12. Turning to our microgravity development value driver. Today, I am extremely excited to announce that in July, SpaceMD, Redwire's venture company, has signed a historic agreement to purchase an entire Starfall spacecraft, a new SpaceX vehicle that enables affordable, routine access to the microgravity environment. The unprecedented capabilities that SpaceX's Starfall offers will dramatically accelerate our ability to deliver pharmaceutical, biotech, and other in-space microgravity manufacturing capabilities. SpaceMD's first Starfall mission is slated for launch in 2028 and is expected to have the capacity to carry up to an impressive 32 PIL-BOXes, each with the ability to crystallize up to four compounds or other payloads, making it the largest dedicated commercial microgravity research mission flown in history.

Since Redwire launched PIL-BOX on its inaugural mission in November 2023, 54 PIL-BOXes have flown to the International Space Station, successfully crystallizing 45 unique compounds, including insulin and other critical molecules to treat diseases such as cancer, cardiovascular disease, obesity, and diabetes. With a capacity of up to 32 PIL-BOXes on a single mission, SpaceMD's Starfall mission provides a major leap forward in scaling our microgravity capabilities. It's a game changer. With a platform partner like SpaceX's Starfall, we are creating a new path to accelerate commercial microgravity manufacturing at scale. Please turn to slide 13. Turning next to our combat-proven UAS value driver. During the quarter, Redwire was awarded a high eight-figure, multi-year contract to deliver Penguin Mk3 aircraft to an undisclosed NATO customer. This contract is part of a multi-year modernization program for the country's UAS capabilities.

Building on years of operational combat experience, Redwire's Penguin Mark III was chosen as it delivers a scalable, adaptable solution for the demands of modern defense environments. This is just one example from a quarter with strong defense tech bookings. During the quarter, Redwire was also awarded a Tranche one contract for the Taiwan Coast Guard, as well as announced key follow-on awards for Stalker Block 30 from both the United States Marine Corps and the U.S. Army. At the same time, we continue to invest in our next generation platforms. Stalker Block 40 in the United States and Penguin Mark III in Europe to increase capabilities for the war fighter around the globe. With hundreds of UAS already operational in the field, we are bringing a battle-proven approach to tactical UAS modernization. Please turn to slide 14. Lastly, moving to our sensors and payloads value driver.